The caption of a photo on page 40 of Cleveland County People and Places, by Barry E. Hambright and U. L. Patterson (Google Books preview) says that the Princess Theatre was built in 1917 and was later known as the Carolina Theatre. It was closed in 1960 and the building converted into a Woolworth store.

The aerial photo shows that the theater was in the block south of the town square, which is now the 200 block, so Shelby must have renumbered its blocks at some point. I can’t tell from satellite view if any part of the building is still there or not, but there’s certainly no sign of the fly tower.